This case involves a great many questions both of law and fact, but we will consider it as it is affected by those circumstances, concerning which there is no dispute.
Leeds and Straas being engaged in commercial enterprizes, Straas employed Hodgson to effect insurance on the Sophia and her cargo. A note of Hodgson, with Patton and Dykes as endorsers, is taken for the premium. Another adventure on the brig Hope, grows out of the first, on the Sophia; and the same agent, at the request of the same principal, effects insurance upon this also, with the same Company. The Sophia arrives in safety, but though one of the endorsers is unquestionably sufficient, the premium note remains unpaid. The Hope is lost, and Hodgson professedly suing for the use of Straas and Leeds, has recovered judgment against the underwriters for the amount of the policy. From this amount the premium note connected with that policy was discounted, but that growing out of the insurance on the Sophia, was not pleaded, notwithstanding the identity of the legal plaintiff in that action, with the debtor to the company in the transaction on the Sophia.
The note taken for the insurance on the Sophia, is now set up against the policy on the Hope, in a different form. This bill is filed to compel the parties in interest, Hodgson, Leeds and Straas, to discount it from the judgment against the underwriters.
The equity of this demand is now to be tested.
The right to the discount considered with reference to identity of parties, was clearly a legal one. And had not the Company been injoined in the Chancery of Virginia, during the pendency of the suit upon the policy, they must have lost all claim to the interposition of this Court, by failing to assert their legal rights in the Court to which they properly belonged. But the Chancery of Virginia might have considered the Company in contempt, had they set up in discount a claim then pending, and then injoined in the Courts of that State. And, therefore, we may now be justified in considering the legal rights of the Company, against the policy on the Hope, as derived through the premium note on the Sophia, under all the advantages that it would have possessed, if pleaded as a set-off to the action at law.
The bill, it is true, does not explicitly rest on this, as the ground of its equity, but the facts are so set out, and may be properly considered as making up the case.
What was the state of right as it stood at law? Hodgson, as holder of the policy which he had effected, was, to the amount of his commissions, advances, or even liability incurred in the transaction, a privileged creditor, and that possession could not be violated until he was indemnified or compensated. If he be considered as the legal plaintiff in the action on the policy, and, in fact, the legal owner of the money recovered for the use of others, the law would not suffer him to be deprived by transactions between Straas and Leeds, to which he never assented, of any legal advantage derived from possession of that money.
